Bank conveyancing panel requirements re Unknown Rights and Easements Indemnity Insurance
Birmingham Midshires and Bank of Scotland, as with most banks, dictate their own requirements when it comes to unknown rights and easements indemnity insurance. This page is designed to help property law practitioners on the numerous mortgage company solicitors panel where the title to be charged contains unknown rights and easements. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each lender, be it Natwest, RBS or Santander. The information on this page is not focused on unknown rights and easements indemnity insurance requirements.
Need help with unknown rights and easements indemnity insurance from your lender?
Yorkshire Bank Home Loans and Godiva Mortgages in common with many banks, obligations require that where unknown rights and easements indemnity insurance is to be put on risk:
- your practice is required to disclose to the insurer all relevant information which you have gathered
- the unknown rights and easements indemnity insurance policy must be placed on risk without expense to the mortgage company
- the unknown rights and easements indemnity insurance policy should not contain terms which you know would invalidate or prejudice the interests of the bank
- your practice are responsible for approving the terms of the unknown rights and easements policy on behalf of the bank
- the unknown rights and easements indemnity insurance policy should always be in favor of the lender and, wherever possible, for the benefit of the mortgagor and any future owner or lender. If the borrower will not be protected by the unknown rights and easements indemnity insurance policy, the mortgagor must be informed accordingly.
- the level of indemnity must meet the requirements for the lender (See Part II Handbook requirements )
- your firm is duty bound to point out to the borrower that the borrower will need to adhere to any conditions of the unknown rights and easements indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in relation to the insurance
- your firm must provide a copy of the unknown rights and easements indemnity insurance to the borrower and explain to the mortgagor why the unknown rights and easements indemnity insurance policy was effected and that a further policy might be mandatory if there is further borrowing against the security of the property
| Lender | Requirement |
|---|---|
| Accord Mortgages | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Adam & Company | The open market value of the property according to the valuation report. |
| Aviva Equity Release | Full value of the property. |
| Barnsley Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Family Building Society | An amount at least equal to the mortgage advance. |
| Godiva Mortgages | Minimum of the value of the property. |
| Holmesdale Building Society | 110% |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Leeds Building Society | An amount at least equal to the amount of the mortgage advance plus 10%. Any indemnity insurance policy must protect the borrowers, any successor in title and any Mortgagee. |
| Metro Bank | The open market value of the property according to the valuation report. |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Mortgage Express | Amount of loan + 15% |
| National Westminster Bank | An amount equal to the value of the property. |
| Principality Building Society | Full market value of the property is preferred but if this is not available we will accept the loan advance amount as minimum. You must approve the policy on our behalf. The estimated property value is stated in the Mortgage Offer in remortgage cases. Otherwise it will be stipulated in the Valuation. |
| TSB | The value of the property |
| The Mortgage Lender | An amount at least equal to the mortgage advance. |
| Yorkshire Bank | Open market value of property. |
Non lender-specific considerations
The full terms, conditions and exclusions for unknown rights and easements indemnity insurance are identified in the policy paperwork. Conveyancing solicitors are obliged to direct your non-lender client to the unknown rights and easements indemnity insurance policy paperwork. Unknown Rights and Easements indemnity insurance is devised to grant indemnity in respect of the risks set out in the policy schedule - so it’s important to check the document to determine that it is in order. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.Important characteristics and benefits of unknown rights and easements indemnity insurance :
Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Unknown Rights and Easements indemnity insurance Cover normally includes- The cost of works (including professional fees) for the purpose of the development begun, or contracted for, before the commencement of proceedings for the enforcement of the risks specified in the unknown rights and easements insurance, to the extent that such costs are rendered abortive by court decision.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurer
- Diminution in value due to the successful enforcement of the risks specified in the unknown rights and easements insurance.
- Liability for damages or compensation incurred in any action concerning the risks specified in the unknown rights and easements indemnity insurance, including legal and associated costs.
- Money paid with consent in writing from the insurance company to free the property from the risks specified in the unknown rights and easements indemnity insurance.
- The cost of altering or taking down all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
As with any insurance policy, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the unknown rights and easements policy will not be valid.
Unknown Rights and Easements Indemnity Insurance has limitations - Further considerations
Unknown Rights and Easements Indemnity insurance isn’t a solution to all of the relevant problems.WhenIBought
Where the rights in question concern drains, pipes or cables, has a sale or remortgage exposed uncertainty about whose services cross the land and who can reach them for repairs? What did you understand about those arrangements when you bought? WhenIBought's easements and service rights page explores these issues, including other people's services crossing your property, and invites you to tell us what happened.
Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender solicitor panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most unknown rights and easements Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The above information covers to properties in England and Wales.